Car Rental Tip Sheet

Dear New Yorker:

Renting a car is often a necessity, even for people who own one. There are many reasons why consumers wind up at the rental counter: vacations, business trips, a car to take the kids to camp, a replacement vehicle while our own cars are in the shop. In all, there are millions of car rentals each year in New York.

Yet despite the fact that renting a car is a common experience, the transaction itself can be very confusing. Given the long, complicated contract and the recent changes in the state law regulating car rentals, that is not surprising.

For example, there are a host of add-on charges presented to consumers at the counter, each with a cryptic name, often referred to simply by initials – SLP, CDW, PAI, PEC, and on and on. What are these extra charges? Do I have to pay them to rent the vehicle? Should I take any of them? Will my own car or homeowner’s insurance policies provide all the insurance coverage I need? How about my credit card? Do the car rental companies have to provide minimum levels of insurance coverage even if I do not buy extra insurance from them? Is that minimum coverage enough? Can the car rental company charge me extra to have other people besides the renter drive the car? Do I have to have a credit card to rent a vehicle? Can they refuse to rent a car to me if I am under 25 years old? Can they charge me more just because I am under 25?

This tip sheet will help you to answer these questions. Once you know the answers, you may be able experience significant savings on your next car rental, just by avoiding unnecessary optional charges.

You should also be aware that New York State law prohibits car rental companies from refusing to rent to consumers who are 18 or older, who do not have a credit card, or because of race, color, ethnic origin, religion, disability or sex. If a car rental company is violating New York’s laws governing this business, I want to know about it so that our office can stop it.

To learn more, or if you have a complaint against a company, call or write:

New York State Attorney General
The Capitol
Albany, New York 12224

Insurance Sold At The Counter Is Optional

Selling consumers additional insurance coverage, often unnecessarily duplicating coverage they already have, is the primary way car rental companies increase the cost of the rental. There are four different types of insurance and insurance-like coverages the companies try to sell to consumers at the rental counters -- Collision Damage Waiver (CDW), Supplemental Liability Protection (SLP), Personal Accident Insurance (PAI), and Personal Effects Coverage (PEC). Car rental companies are prohibited from refusing to rent you a car unless you purchase the additional insurance. The coverages are all optional. Combined, they can add up to $30 per day to the rental bill. Each coverage protects against a different risk, but your car, home, life, or health insurance policies, or your credit card, may provide all or part of the protection you need, particularly when combined with the minimum insurance the car rental company is required by law to provide as a part of every rental.

Collision Damage Waiver (CDW)

Also known as Loss Damage Waiver (LDW) or Physical Damage Waiver (PDW). For a fee of $9 per day for cars costing less than $30,000 or $12 per day for more expensive cars, the car rental company will waive all or part of its cost if the rental car is damaged or stolen, provided the car is not driven by an unauthorized driver, driven recklessly, or the coverage is voided for several other reasons. While this coverage may make sense for some renters, you should be aware that if you have a New York automobile insurance policy you already have this coverage for a rental vehicle, unless you declined to accept it when you purchased that policy. In addition, most premium credit cards, such as gold or platinum cards, provide this coverage, with certain limitations, as a benefit of using the credit card to rent cars. Some cards do not provide this benefit for luxury cars, SUVs and vans. Before you pay a lot for CDW, it is worth a call to your insurance agent and credit card company to find out if you need to purchase it.

Supplemental Liability Protection (SLP)

Also known as Liability Insurance Supplement (LIS) or Supplemental Liability Insurance (SLI). For a fee of approximately $10.95 per day, the car rental company will supplement the liability insurance that the company must, by New York law, provide. That required coverage consists of the same minimum levels of liability insurance which all vehicle owners in New York must have: $25,000 of bodily injury liability protection if one person is injured in an accident, $50,000 if there is more than one person injured; $50,000 if there is one death from an accident, $100,000 if there is more than one death; plus $10,000 of property damage liability protection. For many renters who have modest amounts of assets, the minimum coverage the car rental companies must provide as a part of the rental may be enough to protect them from lawsuits by victims of accidents involving the rental car. If you have your own automobile insurance policy with coverage above the minimum amounts, your policy should cover you when you operate a rental vehicle, so SLP is likely not needed. However, SLP usually provides $1 million of liability protection, considerably more coverage than most consumers have under their own automobile insurance policies. So if there is a reason that you want more coverage for the rental than you ordinarily carry for your own car, or you do not have an automobile insurance policy, buying the SLP may make sense.

Personal Accident Insurance (PAI)

This coverage, usually costing about $3 per day, provides medical, ambulance and death benefits for the renter and passengers of the rental car in the event of an accident. The medical coverage is usually around $3,500 and the ambulance benefit $150. Typically the death benefit is $175,000 for the renter and $17,500 for the passenger. Many of these benefits duplicate coverage you may already have under your health, life or automobile insurance policies, or duplicate coverage that the car rental company must provide under New York’s No Fault law.

Personal Effects Coverage (PEC)

This coverage, which typically costs $2 per day, usually provides $500 per person of insurance coverage, with a $1,500 maximum, for theft of personal effects of the renter and his or her family. Again, this coverage may duplicate coverage the renter already has through a homeowner’s or tenant’s policy, although the coverage usually pays in addition to that other insurance. That means that your own policy will typically pay first, and when its policy limits have been reached, the PEC will then pay.

Additional Drivers Are Allowed

Car rental companies must allow your spouse to drive the vehicle if he or she is licensed and at least eighteen years of age. Other licensed drivers can be authorized to drive the rental vehicle if expressly listed on the rental agreement. Car rental companies are permitted to charge $3 per additional driver per day.

Age Discrimination Prohibited

Car rental companies in New York are required to rent to licensed drivers who are 18 years of age or older. However, they may charge a surcharge for drivers who are under 25. The amount of the surcharge can vary substantially from one car rental company to another, so shop around.

Credit Cards Are Not Required

You do not have to have a credit card to rent a car in New York. However, if you do not have a credit card, the car rental company may require you to go through a screening process that can take up to several days. The company may require a cash security deposit as well. If you do not have a credit card, check with the car rental company well ahead of when you want to rent to find out what its procedures are for non-credit card rentals.

Discrimination Prohibited

Car rental companies are prohibited in New York from refusing to rent a car to any person otherwise qualified because of race, color, ethnic origin, religion, disability, or sex.